What is bakery insurance?
Bakeries make delicious goodness every day for countless people. From loaves of bread to cakes and cookies, people can stop by and get their carb and sugar fix from the nearest bakery.
Bakery insurance is a way for bakery business owners to protect themselves from potential risks. There are lots of exposures to lawsuits, from open ovens to disgruntled customers. With a good bakery insurance policy, you are able to rest easy knowing your business is covered.
Who needs bakery insurance?
Both commercial and home bakeries need to have bakery insurance to cover their potential risks. This includes (but is not limited to):
- Bakeries
- Pastry shops
- Donut shops
- Bagel shops
- Cafes
- Pie shops
It can protect your business from paying out massive amounts of money if an employee injures themselves, customers get sick from a bad muffin, or any other accident happens that causes bodily injury or property damage.
What insurance do bakery businesses need?
To make sure that your bakery is adequately covered, you should look into where your business is at risk and match insurance coverage to mitigate those risks. Popular types of insurance with bakeries are general liability insurance, commercial auto insurance, workers’ compensation insurance, and more. Find out where your business is exposed and get a policy that lets you rest easy.
Common types of bakery insurance:
General liability insurance
This type of insurance covers a wide variety of claims that could be made against your business due to accidents and other common risks. It will offer financial protection if someone other than you or your employee(s) is injured, or non-company property is damaged and you are held responsible. It will also cover if another business files a lawsuit against you for advertising injuries.
Commercial auto insurance
If your bakery makes deliveries or uses a company vehicle to pick up supplies, commercial auto insurance is ideal to have. It will cover any bodily injury and property damage claims that arise from an accident involving your work vehicle.
Workers’ compensation insurance
If an employee is injured while on the job, workers’ compensation insurance will kick in and cover the costs of lost wages, medical expenses, and rehabilitation. If an employee accuses the business of negligence and opens a lawsuit against the company, employers’ liability insurance will cover the expenses associated with the lawsuit such as court fees, lawyer fees, and settlements. Employers’ liability insurance is usually included in the workers’ compensation policy, but you should always verify the terms of your specific policy.
Business owner’s policy
Also known as BOP, business owner’s policy combines both general liability insurance and commercial property insurance into a single policy. This type of policy is popular among small businesses that want to save on premium costs.
What are the limits of bakery insurance?
Just like any other industry, each bakery is unique in the coverage it needs. There can be a large commercial bakery supplying hotels all across the city daily or a small bakery in a strip mall. Each one of these has unique needs when it comes to coverage limits. The limits you choose for your business should reflect on its size and the risks associated with it, the equipment you use, and where your business is located, among other factors. Below are the median limits that bakeries choose, but your business may require different limits.
| General liability insurance | $1,000,000 per occurrence |
| Commercial auto insurance | $1,000,000 aggregate |
| Workers’ compensation insurance | $100,000 bodily injury per accident |
| Business owner’s policy | $1,000,000 per occurrence |
How much does bakery insurance cost?
There are different factors that can affect how much bakery insurance costs. Unfortunately, sending your provider a free cake most likely will not get you a premium reduction. Factors that can affect your premium include (but not limited to):
- Location of your business
- History of claims made
- Number of people your business employs
Grouping policies together with the same insurance provider can help save money through discounts. Below you can find the median costs for each type of insurance mentioned. Your actual premium may vary.
| General liability insurance | $485 annually |
| Commercial auto insurance | $1,050 annually |
| Workers’ compensation insurance | $1,995 annually |
| Business owner’s policy | $795 annually |
How to choose the best bakery insurance?
Take some time to sit down and assess where your business is exposed and search for an insurance policy that matches your needs. Here are some tips to consider:
- Business risks: Make an assessment of the risks associated with your business and choose a policy that covers them adequately.
- Customize: A provider should be able to customize their existing products to meet your needs. If they are not able to, it may be best to move on to a different one.
- Customer feedback: Making sure the provider has an A rating with the Better Business Bureau or similar, credible rating entity. You can also look up reviews by other customers to see what the customer opinion is about the company.
- Bundling: Providers that focus on building relationships with their customers are almost always willing to work with clients on cost-efficient packages of coverage.